Europe Leans on Less Stable Markets for Grains

The world is in its fifth season of grain price volatility, and it doesn’t appear the ebbs and flows of key commodity crops will stabilize in 2012, analysts say.

Prices for corn, soybeans, wheat and oats have enjoyed favorable prices since 2008, when food scarcity drove down national reserves and created some unpredicted import/export schemes. Now, analysts are trying to determine if commodity prices have reached a new high, or if perhaps they might be in a bubble.

“Wheat, I would say, is priced too high right now,” said Jack Watts, senior analyst of cereals and oilseeds for UK-based Agriculture and Horticulture Development Board and the Home-Grown Cereals Authority. His comments came during a presentation at CropWorld London Oct. 31.

One reason for the inflationary prices is last year’s drought in the Black Sea region, which decimated the production of wheat, especially in Russia, the world’s fourth-largest producer behind China, India and the US. The US and Canada were able to fill some of the void. But the resulting low stock-to-use ratios painted a frightening picture for those in favor of more predictable prices.

“The world is becoming more reliant on less-stable markets for wheat production, and there is an export shift from the US to the Black Sea region,” Watts said.

There are four key factors contributing to the high grain prices and volatility:

1) The rising demand for livestock feed diverts food from the human food supply and can lower the stocks-to-use ratio and national reserves, which are at precarious lows around the world.
2) Crop competition for arable land: With corn and soybean prices at healthy levels, farmers are less willing to devote area to wheat and oats.
3) Emerging markets are exacerbating market conditions with heightened demand for cooking oils, feed stocks and higher-quality vegetables.
4) Speculation from the investment community creates more derivatives than actual production.

“Reactions in the futures market are not reflective of underlying fundamentals, but rather a reaction to what is going on today,” Andersons Research Economist Graham Redman said during a CropWorld discussion on hard grains. “But the noise created by the speculators is clouding the real factors contributing to volatility, such as demand. The 7 billionth consumer of agriculture was born today, and the industry might remain a bit unsettled until we know what policy developments and concerns might arise.”

Wheat for December delivery fell 8.25 cents to $5.90 a bushel, CBOT reported Nov.18. December corn fell 13.25 cents to $5.97 a bushel; December oats fell 4 cents to $3 a bushel; and January soybeans dropped 16.25 cents to $11.52 a bushel.

Europe

Africa/Middle East

Live From the Trade Summit: More Generics, More Mergers to Follow a Tough Year

The global crop protection market fell 9.8% to $55.6 billion in 2015, the first decline in the last five years,

Africa/Middle East

Humates Market Surging

“Humic substances are recognized by most soil scientists and agronomists as the most important components of a healthy, fertile soil,”

Agrichemicals

BASF Agricultural Solutions Sales Fall 13% in Q2

BASF’s Agricultural Solutions business saw a 13% decline in sales in the second quarter, citing a market environment that remains

Agrichemicals

Bayer Boosts Monsanto Offer, Provides ‘Certainty on Financing and Regulatory Matters’

Monsanto all-cash offer increased to $125 per share on July 1 after additional information received in private discussions.

Europe

EuropaBio Reacts to European Commission Approach to GMO Testing Requirements

EuropBio, which promotes and supports biotechnology in the European Union, expressed its disappointment over the European Commission’s decision to disregard

Africa/Middle East

State of the Industry 2016: The Mantra: Adapt and Innovate in Difficult Times

Crop protection companies are battling an epic combination of challenges, but find ways to keep growing.

Agrichemicals

Monsanto Profit Falls on ‘Unforeseen Level of Challenges’ in 2016

Monsanto’s third-quarter profit fell sharply from a year ago, hurt by lower corn and soybean seed and crop protection sales.

Agrichemicals

Dow AgroSciences/University of Warwick Discover Unique Herbicide Binding Pattern

Research from Dow AgroSciences, a wholly owned subsidiary of The Dow Chemical Company, and the University of Warwick, United Kingdom, have

Americas

Monsanto Enters Genome-Editing Deal with Nomad Bioscience

Monsanto Company and Nomad Bioscience GmbH have announced a licensing agreement whereby Monsanto has obtained rights to apply Nomad’s proprietary

Agrichemicals

Following Brexit: The Future of Crop Protection and GMOs in the EU

The headlines and commentaries can be a little scary: “Brexit Could Trigger the Breakup of the United Kingdom” “More Countries

Agrichemicals

Eden Research’s 3AEY Fungicide Receives Label Extension in Spain and Greece

Eden Research plc’s 3AEY fungicide can now be used to treat vine powdery mildew in Spain and Greece. Eden, along

Africa/Middle East

Stockton Signs Distribution Deal with Syngenta

Biologicals company the Stockton Group has signed an agreement with Syngenta as the exclusive global distributor of a new biofungicide

Africa/Middle East

Why the West Forgot the Farm, and How We’re Rediscovering Them

About 1% of the U.S. population are full-time farmers on 2.2 million farms. In the EU about 2.5% of the

Agrichemicals

Arysta LifeScience Expands Portfolio in Ukraine

Arysta LifeScience Ukraine recently registered five products, including fungicides Evito T and Starpro, herbicides Desperado and Proponit Duo, and plant

Africa/Middle East

Humans For Agriculture: A European View on Changing Attitudes Toward Biotech

James Gurney is a France-based microbiologist who comes from a farming family in the UK. Gurney, along with fellow long-time

Europe

BASF Licenses Clearfield Wheat Technology to Northern Seed LLC

BASF has licensed Northern Seed LLC to perform research and development of BASF’s proprietary and patented Clearfield technology in wheat.

Agrichemicals

HELM AG Earns EU Customs Certification

HELM AG was awarded Authorized Economic Operator customs certification under the European Union’s new Customs Code, the first company in

Agrichemicals

Bringing Back the Human Side to Ag

How personal stories, science, and outreach are advancing the public’s acceptance of modern agriculture.

Africa/Middle East

SLIDESHOW: Let’s Tell the Story of Agriculture

How personal stories, science, and outreach are advancing the public's acceptance of modern agriculture.

Latest News

Asia

Seed Companies Unite Against India’s Technology Proposal

Several big seed companies have formed an alliance opposing the Indian government’s insistence that the seed companies share their technology

Industry News

ACETO Board of Directors Increases Quarterly Cash Dividend by 8.3%

ACETO Corporation, an international company engaged in the development, marketing, sale and distribution of Human Health products, Pharmaceutical Ingredients and

Industry News

Vestaron Announces Manufacturing Partnership With Capua Bioservices

Vestaron Corp., a developer of novel, naturally occurring peptides with anti-insect properties, announced the signing of a multi-year manufacturing agreement

Industry News

Yara Signs Acquires Adubos Sudoeste’s Blending Unit in Catalão, Brazil

In a further step to expand its participation in the agricultural market in the Brazilian Midwest,  The investment is aligned

Asia

Monsanto Withdraws Application for GM Cotton Seed in India

Seed giant Monsanto has chosen to withdraw its application to introduce its newest GM cotton seed variety in India in